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Technology Stocks : JDS Uniphase (JDSU)
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To: Cary Salsberg who wrote (21193)8/11/2001 6:59:06 PM
From: sea_biscuit  Read Replies (1) of 24042
 
There is obvious attraction in a market leader down over 90%. This attraction must be tempered by our knowledge that the top was mania prices and the current situation has the inertia of 1.32 Billion shares.

I agree. I can do no better than quote one of the greatest long-term investors, Ralph Wanger :

" Newspapers, magazines and television
keep telling us that "instantwealth.com"
is down 96% from its high. This sets up
the delicious idea that a stock down 96%
from its high must be cheap now. This is
nothing more than the trap of
"anchoring." The proper solution to this
problem is to understand that these
magical high prices never really
happened. That high-tick trade took
place between two day traders looking at
numbers on their computer terminals, who
were trading a ticker symbol. They
understood the stock as much as the
island people of Tammu understood how to
build a B-29. That high price? Forget
about it. It's like the golf round you
had a few years ago when you shot 38 on
the first nine. It hasn't recurred, it's
not going to happen again, and, if you
think it might, you are doomed to a life
of disappointment and lost bets. I
believe you should look at stocks in
terms of earnings, cash flow, and
realistic growth prospects and ignore
the day-trader fantasies of last year."
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